Nebraska Sales Tax Enforcement Actions Checklist
Introduction
Sales tax enforcement actions are notices or letters sent by the Nebraska Department of
Revenue when a business has not filed required sales tax returns, has not paid sales tax owed, or appears to have underreported retail sales. These notices represent official steps in the state's collection and compliance process.
Enforcement actions can range from notices requesting missing returns to demands for payment, penalty assessments, or liens filed against business assets, including personal property. Understanding what triggered the enforcement action and responding appropriately is essential because ignoring these notices typically leads to escalated collection efforts, including additional penalties, interest, and potential legal action. This checklist explains what enforcement actions mean, why the state issued one, and what steps to take next.
What This Issue Means
A Nebraska sales tax enforcement action is a formal written communication from the
Department of Revenue indicating that your business has a sales tax compliance or payment problem. The action may take several forms: a notice requesting an unfiled return, a demand for payment of unpaid sales tax, a notice of a penalty assessment, or notification that a lien has been filed against business or personal property.
In some cases, the notice requests that you provide documentation to verify that sales tax was calculated correctly and reported on retail sales. Enforcement actions represent the state's official effort to bring your account into compliance with Nebraska sales tax law. Sales tax is classified as a trust fund tax, meaning the tax collected from customers is held in trust for the state and cannot legally be used for other business purposes.
Why the State Issued This or Requires This
Administrative triggers in the Nebraska Department of Revenue's filing and payment tracking system initiate enforcement actions when compliance issues are detected. Common reasons include returns that were never filed, payments not received by the due date, substantial differences between reported retail sales and industry data, or prior notices that went unanswered.
Enforcement actions prompt businesses to file missing returns, make overdue payments, or provide information needed to verify compliance with sales tax requirements. When companies do not respond to initial notices, the state escalates to formal enforcement actions as part of its standard collection procedures.
What Happens If This Is Ignored
Ignoring an enforcement action typically results in the state taking additional collection steps, including follow-up notices, assessing penalties and interest on unpaid amounts, filing liens against business property or personal property, or referring the delinquent tax account to a collection agency. The state may also initiate proceedings to revoke or suspend your sales tax permit, which would require your business to cease operations.
Extended delays in responding lead to more substantial penalties and interest accumulating on the delinquent tax account. State guidance does not specify fixed timeframes for escalation, but ignoring these notices generally leads to more serious consequences over time.
What This Does NOT Mean
An enforcement action does not mean criminal charges have been filed against you or your business. It does not automatically mean the state has seized your bank account or business property, though a lien may have been filed as a legal claim against real or personal property.
The notice does not necessarily mean your business will be shut down immediately. However, continued non-compliance may eventually lead to revocation of your sales tax permit and more severe enforcement.
An enforcement action is a collection and compliance tool, not a criminal proceeding. Receiving one does not mean all disputes about the amount owed have been resolved against you; you may still have options to discuss or contest the underlying tax liability. This notice is separate from and unrelated to property tax obligations, which are administered by county authorities rather than the Department of Revenue.
Checklist: What to Do After Receiving This or Identifying
This Issue
- Read the entire notice from beginning to end.
- Identify the specific reason for the action (unpaid tax, unfiled return, penalty, lien filing, or
- Note the tax period or periods referenced.
- Write down any deadline mentioned in the notice, including the due date for any demand
- Locate the contact information for the Department of Revenue provided in the notice.
Step 1: Review the Enforcement Notice Completely
other reason). for payment.
- Collect sales tax returns that were filed for the periods in question.
- Gather bank statements, sales records, or accounting records for the period referenced
- Find records of any sales tax payments made during that time.
- Locate invoices, receipts, or other documentation showing what retail sales were
- Compile any prior correspondence with the Department of Revenue about this
Step 2: Gather Relevant Business Records
in the notice. reported. delinquent tax account.
- Check your business records to confirm whether a return was actually filed for the period
- If a return was filed, verify the date it was submitted and the amount of tax reported.
- If a return was not filed, identify whether the business was operating and had retail sales
- Determine whether any payment was made for the tax period in question and the date of
Step 3: Determine If a Return Was Never Filed or If Payment Is Missing
mentioned. during that period. that payment.
- Call the Nebraska Department of Revenue using the phone number listed on the
- Explain that you received an enforcement action and request clarification on what is
- Ask whether the issue is a missing return, unpaid tax, penalty, or other matter.
- Request information about available payment options, payment plans, or procedures for
- If your business files through a certified service provider, confirm whether they received
- Take notes on the name of the person you spoke with and what they told you.
Step 4: Contact the Department of Revenue
enforcement notice. owed and why. disputing the amount shown in any balance due notice. copies of enforcement correspondence.
- Follow any specific instructions printed on the enforcement notice.
- If the notice requests a missing return, determine what information is needed to
- If the notice contains a demand for payment or a balance due notice, note the amount
- If the notice describes a lien filing against your business assets or personal property,
- Respond within any deadline specified in the demand for payment or other enforcement
Step 5: Respond to the Notice According to Its Instructions
complete that return. due and any payment deadline. note the date and amount of the lien. notice.
Step 6: Prepare or File a Missing Return (If Applicable)
- If the enforcement action is due to an unfiled return, gather sales information for that
period.
- Complete a Nebraska Sales Tax Return for the period using your business records.
- Calculate the sales tax owed based on your actual retail sales and the applicable rate.
- If you file through a certified service provider, coordinate with them to ensure proper
submission.
- Sign the return according to state requirements.
- Submit the completed return to the Department of Revenue by the deadline in the notice.
- Determine the exact amount owed, including any tax, penalties, and interest listed in the
- Contact the Department of Revenue to confirm the current amount due and available
- Ask whether a payment plan or installment payment arrangement is available if paying
- Understand that Nebraska regulations allow payment over 90 days without a formal
- Make the payment or arrange a payment plan in accordance with state procedures.
- Keep proof of payment or payment plan agreement for your records.
Step 7: Arrange Payment (If Applicable)
balance due notice or demand for payment. payment methods. the full amount is not possible. written agreement, but arrangements extending beyond 90 days require a written payment plan with electronic payment provisions.
- Keep copies of the original enforcement notice and all related correspondence.
- Save records of all telephone calls, emails, or letters exchanged with the Nebraska
- Write down dates, times, names, and details of any conversations.
- Retain confirmation numbers or reference numbers provided by the state.
- File all documentation together in case the matter needs to be addressed later.
Step 8: Document All Communication
Department of Revenue.
- Contact the Department of Revenue to ask about procedures for requesting penalty
- State any factual basis for the request, such as reasonable cause for non-filing or late
- Understand that tax and interest must be paid before a penalty abatement request will
- Note that each penalty requires a separate abatement request, and prior abatement
- Request written information about how penalty review requests are evaluated and
Step 9: Request Abatement or Penalty Review (If Applicable and Desired)
abatement or review using Form 21. payment that was beyond your reasonable control. be processed. history will be considered. processed.
- If the enforcement action involves a levy or seizure, understand that exemptions under
- Personal property exemptions include necessary clothing, household goods valued at up
- To claim exemptions from levy, you must file a written list with the Department of
- Understand that absolute property homestead exemptions may apply up to $60,000 in
- Contact the Department of Revenue for specific guidance on asserting these exemptions
Step 10: Understand Your Rights Regarding Property and Exemptions
Nebraska law protect certain assets from levy. to $1,500, tools of trade valued at up to $2,400, and professionally prescribed health aids.
Revenue within 20 days identifying which property you claim as exempt. value. in your situation.
- Understand that continued non-compliance with enforcement actions may lead to sales
- A revocation hearing provides the opportunity to show cause why your sales tax permit
- Operating without a valid sales tax permit after revocation or suspension can result in
- If your sales tax permit is revoked, reinstatement requires demonstrating future
- The Department of Revenue may also require a security deposit of up to three times
Step 11: Consider Your Sales Tax Permit Status
tax permit revocation or suspension proceedings. should not be revoked. criminal penalties. compliance and paying a reinstatement fee ($25 for the first revocation, $50 for subsequent revocations). your average tax liability to ensure future compliance after reinstatement.
- Check back with the Nebraska Department of Revenue after submitting a return or
- Request written confirmation that the enforcement action has been resolved or the
- Maintain compliance with future filing and payment deadlines to avoid additional
- Review your sales tax account regularly to ensure all returns are filed on time.
- If you use a certified service provider under the streamlined sales and use tax
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 12: Monitor Your Account Regularly
payment to confirm receipt. delinquent tax account has been closed. enforcement. agreement, verify that they are submitting returns and payments timely on your behalf.
What Happens After This Is Completed
Once you respond to an enforcement action, the Nebraska Department of Revenue typically processes your response and updates your delinquent tax account. If a lien was filed against personal property or other assets, Nebraska regulations require the Department of Revenue to record a termination statement once the delinquency is paid, abated, adjusted, or reduced to less than $50.
Follow-up notices may confirm that the issue has been resolved or advise of any remaining balance or steps required. In some cases, the state may conduct a more thorough audit or examination of your sales records if accuracy or compliance concerns remain.
Common Mistakes to Avoid
Failure to respond to an enforcement action within the specified deadlines allows the state to proceed with additional collection actions without your input, and delayed responses can result in the accumulation of penalties and interest. Incomplete or inaccurate information about retail sales may trigger additional notices, audits, or disputes with the Department of Revenue.
Never assume the state has received your response without confirmation—always retain copies and request written acknowledgment that the payment obligation has been satisfied or that the balance due notice has been resolved. Disregarding deadlines in enforcement notices may result in additional penalties, revocation of the sales tax permit, or escalated enforcement action.
Most enforcement actions include both the original tax owed and penalties or interest, so understanding what portion of the amount is tax, penalty, or interest helps with payment plan or dispute procedures. Continued inaction generally leads to escalation rather than dismissal and may ultimately result in the revocation of a sales tax permit.
Prompt responses to follow-up notices from the Department of Revenue after submitting a return or payment prevent further escalation of your delinquent tax account. Failing to timely assert your exemptions from levy rights within the 20-day window when enforcement escalates to levy or seizure may result in loss of those protections for personal property and other exempt assets.
Frequently Asked Questions
Does an enforcement action mean I am being criminally prosecuted?
No, sales tax enforcement actions are civil collection procedures to bring your delinquent tax account into compliance and collect unpaid tax. Criminal prosecution is a separate matter with different methods.
Can I request a payment plan if I cannot pay the full amount right away?
Yes, the Department of Revenue offers payment plan options for businesses with unpaid tax liabilities. You may pay any delinquency over 90 days without a written agreement. Installment payment arrangements beyond 90 days require written agreements with electronic payments.
Will filing the missing return or paying the amount owed eliminate all penalties?
Filing a missing return or paying tax resolves the demand for payment or balance due notice, but penalties and interest assessed prior may still apply. Penalties may be subject to abatement if you request it using Form 21 and demonstrate that the failure was beyond your reasonable control.
If a lien was filed against my personal property or business assets, what happens when I pay the tax owed?
Nebraska Regulation 36-006.06 requires the Department of Revenue to terminate the state tax lien and record a termination statement once the delinquency is paid, abated, adjusted, or reduced to less than $50.
How do I know if the enforcement action is final, or whether I can dispute the amount owed?
If the notice is a balance due notice based on a return you filed, you may request a review. If it is a notice of proposed deficiency determination, you have 60 days to file a petition for redetermination.
What happens if I submit a return showing less sales tax owed than the enforcement action claims?
If your return shows an amount different from the amount the demand for payment states, the
Department of Revenue will evaluate the discrepancy. Provide documentation supporting your reported retail sales and tax calculation.
Can I request that penalties be removed after I comply?
Yes, use Form 21 (Request for Abatement of Penalty) and explain how the failure was beyond your reasonable control. Tax and interest must be paid before the abatement request will be processed.
If I cannot locate records from the period in question, what should I do?
Contact the Nebraska Department of Revenue to explain the situation. The department can advise on reconstruction methods or alternative documentation acceptable for reporting your retail sales.
Does the enforcement action affect my other tax accounts or licenses?
Contact the Department of Revenue directly to understand whether an enforcement action on one account may affect others. Your sales tax permit may be revoked or suspended for non-compliance, which would prohibit business operations.
How long does it typically take for the state to confirm that an enforcement action has been resolved?
State guidance does not specify standard processing times. Contact the Department of
Revenue to ask how long confirmation may take and request a reference number for tracking your delinquent tax account resolution.
What if I file my sales tax through a certified service provider?
Even using a certified service provider to file returns under the streamlined sales and use tax agreement, you remain responsible for compliance and responding to enforcement actions.
Contact both the provider and the Department of Revenue immediately if issues arise.
What are exemptions from levy, and how do I claim them?
Exemptions from levy protect specific personal property and assets from seizure. Nebraska law exemptions include necessary clothing, household goods up to $1,500, tools of trade up to
$2,400, health aids, and homesteads up to $60,000. File a written list with the Department of
Revenue within 20 days of receiving a notice of levy, identifying exempt property and providing values.
Closing
Receiving a sales tax enforcement action is stressful. Still, it's manageable when approached systematically by understanding the notice, gathering your business records, and responding promptly in accordance with the instructions in the demand for payment or balance due notice.
The Nebraska Department of Revenue provides contact information in every enforcement notice; using it to ask questions and clarify what is needed is the best first step.
Compliance with sales tax requirements and attention to filing and payment deadlines help prevent future enforcement actions on your delinquent tax account. Businesses operating under the streamlined sales and use tax agreement or using a certified service provider should promptly verify that all filing and payment obligations are met.
Understanding your rights, including exemptions from levy for personal property, helps protect your interests when enforcement escalates. Maintaining your sales tax permit in good standing is essential for continued business operations, and contacting the Department of Revenue directly for clarification about any aspect of the enforcement action is appropriate and encouraged.
Facing State Tax Enforcement Action?
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